Analyzing Smith & Wesson Brands (NASDAQ:SWBI) and Hasbro (NASDAQ:HAS)

Hasbro (NASDAQ:HAS) and Smith & Wesson Brands (NASDAQ:SWBI) are both consumer discretionary companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Insider and Institutional Ownership

91.8% of Hasbro shares are owned by institutional investors. Comparatively, 59.3% of Smith & Wesson Brands shares are owned by institutional investors. 0.7% of Hasbro shares are owned by insiders. Comparatively, 2.3% of Smith & Wesson Brands shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Hasbro and Smith & Wesson Brands”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hasbro	$4.70 billion	2.83	-$322.40 million	$5.56	16.95
Smith & Wesson Brands	$523.84 million	1.09	$18.48 million	$0.40	31.95

Smith & Wesson Brands has lower revenue, but higher earnings than Hasbro. Hasbro is trading at a lower price-to-earnings ratio than Smith & Wesson Brands, indicating that it is currently the more affordable of the two stocks.

Dividends

Hasbro pays an annual dividend of $2.80 per share and has a dividend yield of 3.0%. Smith & Wesson Brands pays an annual dividend of $0.52 per share and has a dividend yield of 4.1%. Hasbro pays out 50.4% of its earnings in the form of a dividend. Smith & Wesson Brands pays out 130.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Smith & Wesson Brands has raised its dividend for 4 consecutive years. Smith & Wesson Brands is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Hasbro has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500. Comparatively, Smith & Wesson Brands has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Hasbro and Smith & Wesson Brands, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hasbro	0	4	12	0	2.75
Smith & Wesson Brands	0	2	1	0	2.33

Hasbro currently has a consensus target price of $109.43, suggesting a potential upside of 16.13%. Smith & Wesson Brands has a consensus target price of $16.50, suggesting a potential upside of 29.11%. Given Smith & Wesson Brands’ higher possible upside, analysts clearly believe Smith & Wesson Brands is more favorable than Hasbro.

Profitability

This table compares Hasbro and Smith & Wesson Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hasbro	15.97%	141.11%	14.72%
Smith & Wesson Brands	3.53%	5.01%	3.41%

Summary

Hasbro beats Smith & Wesson Brands on 10 of the 17 factors compared between the two stocks.

About Hasbro

Hasbro, Inc., together with its subsidiaries, operates as a toy and game company in the United States, Europe, Canada, Mexico, Latin America, Australia, China, and Hong Kong. The company operates through Consumer Products; Wizards of the Coast and Digital Gaming; Entertainment; and Corporate and Other segments. The Consumer Products segment engages in the sourcing, marketing, and sale of toy and game products. This segment also promotes its brands through the out-licensing of trademarks, characters, and other brand and intellectual property rights to third parties through the sale of branded consumer products, such as toys and apparel. Its toys and games include action figures, arts and crafts and creative play products, dolls, play sets, preschool toys, plush products, sports action blasters and accessories, vehicles and toy-related specialty products, games, and other consumer products; and licensed products, such as apparel, publishing products, home goods and electronics, and toy products. The Wizards of the Coast and Digital Gaming segment engages in the promotion of its brands through the development of trading cards, role-playing, and digital game experiences based on Hasbro and Wizards of the Coast games. The Entertainment segment engages in the development, production, and sale of entertainment content, including film, television, children's programming, digital content, and live entertainment. The company sells its products to retailers, distributors, wholesalers, discount stores, specialty hobby stores, drug stores, mail order houses, catalog stores, department stores, and other traditional retailers, as well as e-commerce retailers; and directly to customers through its e-commerce websites under the MAGIC: THE GATHERING, Hasbro Gaming, PLAY-DOH, NERF, TRANSFORMERS, DUNGEONS & DRAGONS, PEPPA PIG, and other brand names. Hasbro, Inc. was founded in 1923 and is headquartered in Pawtucket, Rhode Island.

About Smith & Wesson Brands

Smith & Wesson Brands, Inc. is a holding company, which engages in the manufacture, design, and provision of firearms. Its portfolio includes handguns, long guns, handcuffs, suppressor, and other firearm-related products. The firm’s brands are Smith & Wesson, M&P, Thompson/Center Arms, and Gemtech. The company was founded by Horace Smith and Daniel Baird Wesson in 1852 and is headquartered in Maryville, TN.